Business acumen refers to the ability to profit from uncertainties and problems in a business environment. Like other human capabilities, business acumen needs to be honed and developed over time by continuously acquiring relevant information. This ability makes business leaders think “outside the box,” which leads them to innovative solutions to complex problems. Business acumen is also fastness and keenness in dealing with and understanding a “business issue” in a likely to result in a satisfactory outcome. In addition, business acumen also has become an effective vehicle for enhancing leadership development and overall business performance. As such, leaders who possess this skill are in high demand today.
In order to develop business acumen, however, one must first be able to articulate an understanding of the different elements that make up a successful business model. While a business model may consist of different elements such as marketing, research and development, and manufacturing, these are but a few of the many that make up a successful business model. Among other things, these elements include the basic operational and ownership structure of the business, its key personnel, and its product lines.
In addition to business acumen, another essential quality that one must possess in order to effectively contribute to leadership development is an understanding of business management and leadership. Business management consists of the core competencies that make up business management, and leadership involves influencing others to take desirable action. Learning both skills allows leaders to influence others to proactively take steps to achieve business goals, increasing the company’s profitability while effectively managing and staffing the organization. The two skills are closely related and, when appropriately used, have tremendous impact on overall business success.